REITs Kept Pace in Q1, Though Some Faltered

S&P headquarters in Lower Manhattan

NEW YORK CITY—While retail REITs have gotten a fair amount of largely negative attention lately due to the accelerated pace of announced store closures and bankruptcies from distressed retailers, the noise surrounding the sector drowned out a quieter parade of solid performance in the first quarter from real estate trusts generally. S&P Global Ratings reported that REITs’ Q1 results were generally in line with expectations, although they pointed to a trend of decelerating growth that S&P expects to continue for the balance of the year.

“We continue to expect stable credit quality and ratings cadence for the sector in 2017, and project NOI growth of 3.0% to 3.5% for our rated REIT universe,” according to an S&P report issued Tuesday. That’s based in part on REITs’ “favorable” access to the capital markets in the first five months of this year.